The present invention relates to the sale of commodities, such as products and services, and more particularly, to a system and method for assisting customers in choosing a bundled set of commodities using customer preferences.
In current practice, the average customer has a difficult time sifting through the enormous number of options for commodities, such as products and services, in order to find the best selection. Moreover, the increasing number of vendors that sell similar products and/or services adds to the difficulty. For example, in one state alone, customers may face a choice between thousands of vendors with hundreds of different plans for telecommunication, entertainment (cable/satellite), and power services.
As an additional complicating factor, many vendors offer multiple services or products that a customer may be interested in obtaining. In order to encourage the customer to select one or more of their commodities, discounts are offered to customers who purchase multiple related commodities. Offering a package of services or products at a discounted price is known as “bundling”. In addition to intra-company bundling discounts, many vendors may also have alliances with affiliate vendors such that a customer will receive a discount if he selects a certain commodity or bundle of commodities from an affiliated vendor.
In the utility services industry, continued deregulation is increasing the number of available options, as well as the customer confusion associated with the new choices. As barriers to entry for services, such as local phone service and cable are reduced, competition between service providers for customers will further intensify as the number of competitors increases. In response to the increased competition, many service providers offer discounts to customers that select a bundle of related services from that provider or a provider affiliate.
In addition, services are beginning to converge, with the same cable or wire serving multiple purposes. For example, some combination of television, Internet and telephone services can come through the cable TV line, or voice and data can travel simultaneously over traditional copper telephone wires. In response to this convergence and the increased competition resulting from deregulation, many service providers offer bundling discounts to customers for selecting seemingly unrelated services. For example, some cable companies are offering bundled packages that include telephone and cable services at reduced costs.
As a result of these numerous options, customers face various challenges. First, customers lack perfect information and are unaware of available choices. Second, customers are barraged with cryptic information from vendors that is difficult to decipher. The perpetual flood of new options that are offered for the purpose of attracting new customers exacerbates this problem. Third, many customers do not make optimum choices of the deals offered by the various vendors because they do not understand the choices in general, the impact the choices may have, and the cost of the choices. Many customers may be unaware of bundling discounts offered by vendors for customers that select a certain bundle of commodities. Fourth, significant time investment is required for customers to find all of the information they need to compare offerings and bundles of offerings from different vendors. Usually, it takes more time and effort than the average customer wants to exert. Finally, customers feel like they are at the mercy of the large “monopolistic” merchants and service providers.
Additionally, vendors must contend with their own set of issues. Vendors spend significant amounts of money on educating customers, selling products and offering service plans to customers. Vendors want to obtain new customers at a reasonable cost and minimize the impact of turnover on their business. For example, a telecommunication service provider may spend between $100-$350 to acquire each new customer. As competition increases, customer retention is also an issue.
Many vendors rely on conducting their own internal research studies in order to better understand their potential target audience. The marketplace is changing so rapidly that it is difficult for vendors to keep pace. Vendors need to remain current with their customer base and anticipate new services and products based on the changing needs of the customer.
One method of attracting and retaining customers has been to offer bundles of goods or services to customers at a discounted price. A targeted bundle of goods or services is usually directed to customers who might be interested in purchasing each of the commodities within the bundle.
Several systems and methods have been developed over the years to solve the above problems, but these systems and methods have many disadvantages. For example, many merchants or third-party resellers have web sites that offer side-by-side comparisons of products and/or services. One disadvantage of such a web site is that the customers have to spend a significant amount of time determining what is best based on their own subjective assessment of the value associated with the various options. Another disadvantage is that these web sites may not adequately inform customers of various bundling options that are available and do not give customers the ability to compare these bundling options.
Many web sites present only the “lowest cost” commodity, without considering customer preferences or available bundling discounts. If the product or service does not meet their needs, frustrated customers will either return the products or switch to different service providers. If the customer is looking for several related commodities, then the customer wants the set of commodities that offers the “best value” to him. That is, the commodity or set of commodities that meets the customer's specific needs and desired performance levels at the lowest effective cost.
Accordingly, an integrated system and method are needed to assist customers in selecting the best value for a set of commodities based on the customers' preferences, as well as to assist vendors in acquiring and retaining customers.